When two businesses join forces for a common purpose, a joint venture is born. The businesses may be industry giants, or work-from-home parents, or any size businesses in between. The defining element of a joint venture is the strategic alignment of two of more businesses to reach a goal they might not otherwise be able to attain.
Joint ventures differ from mergers in that no ownership interest in either business changes hands. The businesses may come together for a time, for a defined purpose, but each maintains its own unique identity.
If your business is looking for a way to enter a new market, or enhance your competitive edge, a joint venture may provide the perfect opportunity. But, like any opportunity, there are risks associated with joint ventures, so the relationship and purpose should be carefully defined. Some points to consider in planning your joint venture include:
- Financial obligations of each business/party
- Capital requirements of the joint venture
- Cash distribution planning
- Business governance and control
- Transfer restrictions
- Exit planning
- Whether joint venture members can be vendors or employees
- Antitrust and Securities issues
- Choice of law in the event of a dispute
- Licensing requirements
Many of these factors and others may apply to your joint venture, depending on your individual situation. For an in-depth analysis of the issues that may affect your joint venture, seek legal advice from an experienced Pennsylvania business law attorney.
If you need guidance in structuring your joint venture to meet your goals, or any other matter related to managing your business, the attorneys at the Scolieri Law Group, P.C. can help. Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can take care of the details for you. Contact us today at (412)765-0546 or firstname.lastname@example.org.